What changed in this filing

/stocks — the workspaceLOADING

Item 5. Other Information

2021-05-11 compared with 2020-11-10 · 516 added, 666 removed, 774 unchanged (60% of the section changed)

13 unchanged sentences

       Trade -

billed (less allowance for doubtful accounts of $388 and $333),

billed (less allowance for doubtful accounts of approximately

$400), including contract retentions

1 unchanged sentence

Prepaid expenses and

Refundable income

Total current

24 unchanged sentences

Operating lease

Current portion of PPP

Current maturities of

1 unchanged sentence

Total current

11,676  

Deferred buy-back lease

3 unchanged sentences

current maturities

PPP loan - less current

24,651  

26 unchanged sentences

per share data)

Three Months Ended September

Nine Months Ended

September 30,

$ 6,485  

$ 8,589  

Three Months Ended March

$ 7,420  

3 unchanged sentences

15,218  

13,209  

32,789  

34,249  

Cost of goods

10,616  

24,971  

27,278  

Operating expenses

9 unchanged sentences

$ 2,867  

$ 1,952  

$ 1,207  

Basic and diluted earnings (loss) per common

$ 0.55  

$ 0.11  

$ 0.38  

$ 0.24  

Weighted average number of common shares

The accompanying notes

are an integral part of the condensed consolidated financial

accompanying notes are an integral part of the condensed

consolidated financial statements.

S MITH-MIDLAND CORPORATION

C ONDENSED CONSOLIDATED STATEMENTS OF S TOCKHOLDERS' EQUITY

 Common Stock

 Additional Paid-in

 Treasury Stock

 Additional

Paid-in Capital

 Treasury

 Retained

Balance at December 31,

$ 6,242  

$ 14,629  

$ 20,821  

Vesting of restricted

Balance at March 31,

14,591  

at December 31, 2020

$ 6,405  

Vesting of restricted

Balance at June 30,

$ 17,294  

$ 23,649  

Vesting of restricted

Balance at September 30,

of restricted stock

income (loss)

at March 31, 2021

20,161  

12 unchanged sentences

20,783  

Vesting of restricted

Balance at June 30,

13,553  

19,629  

Vesting of restricted

Balance at September 30,

14,132  

20,277  

The accompanying notes are an

2 unchanged sentences

C ONDENSED CONSOLIDATED S TATEMENTS OF CASH FLOWS

Nine Months Ended September

Three Months Ended March

Cash flows from

1 unchanged sentence

$ 2,867  

$ 1,207  

Adjustments to reconcile

1 unchanged sentence

Depreciation and

Gain on sale of

Gain (loss) on sale of

Unrealized (gain)

19 unchanged sentences

and equipment

Deferred buy-back lease

Proceeds from sale of

3 unchanged sentences

financing activities:

Proceeds from the

line-of-credit construction draw 

Proceeds from long-term

8 unchanged sentences

information: 

Non-cash transaction -

right of use asset and lease liability upon lease standard

adoption 

Cash payments for

37 unchanged sentences

has already experienced the following negative impacts on its

backlog reduction, lower production volumes, employee

absence, bidding restrictions within certain key states, and delays

in receipt of materials through the Company's supply

Recent Accounting

Pronouncements

In March 2020, the

FASB issued ASU No.

2020-04, “Reference Rate Reform (Topic

Facilitation of the Effects of Reference Rate Reform on

Financial Reporting”.

The guidance provides temporary

optional expedients and exceptions related to contract

modifications and hedge accounting to ease entities’

financial reporting burdens as the market transitions from the

London Interbank Offered Rate and other interbank offered rates to

alternative reference rates.

The new guidance allows entities to

elect not to apply certain modification accounting requirements, if

certain criteria are met, to contracts affected by what the

guidance calls reference rate reform.

An entity that makes this

election would consider changes in reference rates and other

contract modifications related to reference rate reform to be

events that do not require contract remeasurement at the

modification date or reassessment of a previous accounting

determination.

The ASU notes that changes in contract terms that

are made to effect the reference rate reform transition are

considered related to the replacement of a reference rate if they

are not the result of a business decision that is separate from or

in addition to changes to the terms of a contract to effect that

The guidance is effective upon issuance and generally

can be applied as of March 12, 2020 through December 31, 2022.

Company is currently evaluating the impact of the standard on its

credit agreement accounted for under Codification topic ASC 470,

“Debt”.

In December 2019,

backlog reduction during 2020 from that of 2019, lower

production volumes, employee absence, bidding restrictions within

certain key states, and delays in receipt of materials through the

Company's supply chain.

Recently Issued Accounting

Pronouncement

The FASB issued ASU No.

2019-12, “Income Taxes (Topic 740),

Simplifying the Accounting for Income Taxes”.

eliminates certain exceptions related to the approach for

intraperiod tax allocation, the methodology for calculating income

taxes in an interim period, and the recognition of deferred tax

liabilities for outside basis differences related to changes in

ownership of equity method investments and foreign subsidiaries.

The guidance also simplifies aspects of accounting for franchise

taxes and enacted changes in tax laws or rates and clarifies the

accounting for transactions that result in a step-up in the tax

basis of goodwill.

The standard will be effective for fiscal years,

and interim periods within those fiscal years, beginning after

December 15, 2020, with early adoption permitted.

The Company does

not intend to early adopt the standard and does not expect the

standard to have a material effect on its consolidated financial

condition and results of operations.

Measurement of Credit Losses on Financial

Instruments .”

This standard replaces the incurred loss

impairment methodology in current U.S.

GAAP with a methodology that

reflects estimates of expected credit losses over their contractual

life that are recorded at inception based on historical

information, current conditions, and reasonable and supportable

The pronouncement is effective for smaller reporting

companies for fiscal years beginning after December 15, 2022.

Company is currently evaluating the impact of this standard,

including subsequent amendments, on the consolidated financial

statements and related disclosures.

Product Sales - Over

68 unchanged sentences

date, are reported on our Condensed Consolidated Balance Sheets as

"Customer deposits" (contract liabilities).

"Customer deposits".

Any uncollected billed

1 unchanged sentence

including contract retentions, are recorded within accounts

At September 30, 2020 and December 31, 2019, accounts

At March 31, 2021 and December 31, 2020, accounts

receivable included contract retentions of approximately $1,522 and

4 unchanged sentences

for specifically-identified potential uncollectible receivables.

September 30, 2020 and December 31, 2019, our allowances for

doubtful accounts were $388 and $333, respectively.

March 31, 2021 and December 31, 2020, our allowances for doubtful

accounts were approximately $400.

Sale to Customer with a

60 unchanged sentences

revenue is disaggregated by primary sources of

Three Months Ended September

Nine Months Ended

$ 1,736  

Revenue by Type

Three Months Ended March

Product Sales:

$ 1,699  

6 unchanged sentences

Total Product

20,036  

23,420  

Installation Revenue

3 unchanged sentences

$ 5,393  

$ 13,209  

$ 32,789  

$ 34,249  

The revenue items:

31 unchanged sentences

amounts to conform to current year presentation.

NET INCOME (LOSS) PER

Basic earnings (loss)

per common share exclude all common stock equivalents, primarily

consisting of restricted stock awards, and is computed using the

weighted average number of common shares outstanding during the

The diluted earnings (loss) per common share calculation

reflects the potential dilutive effect of securities that could

share in earnings of the Company. As of September 30, 2020,

there are no outstanding stock options.

For periods prior to

September 30, 2020 outstanding options were excluded from the

diluted earnings (loss) per share calculation when they would have

an anti-dilutive effect.

Earnings per share are calculated as

Three Months Ended September

Nine Months Ended September

EARNINGS (LOSS) PER

Earnings per share are

calculated as follows (in thousands, except earnings per

Three Months Ended March

Basic earnings (loss) per common

$ 2,867  

$ 1,952  

$ 1,207  

Weighted average shares

1 unchanged sentence

$ 0.55  

$ 0.11  

$ 0.38  

$ 0.24  

Diluted earnings (loss) per common

$ 2,867  

$ 1,952  

$ 1,207  

Weighted average shares

    Dilutive effect of stock

options and restricted stock

  Total

weighted average shares outstanding

    Dilutive effect of

restricted stock

Total weighted average

shares outstanding

    Diluted earnings (loss)

1 unchanged sentence

$ 0.55  

$ 0.11  

$ 0.38  

$ 0.24  

The Company has a

mortgage note payable to Summit Community Bank (the

“Bank”), with a balance of $301 as of September 30,

2020. The note has a maturity date of September 20, 2021 and a

fixed interest rate of 3.99% annually with monthly payments of $26

and is secured by principally all of the assets of the

Company. Under the terms of the note, the Bank will permit

restricted stock excluded from the diluted earnings per share

calculation for the three month periods ended March 31, 2021 and

March 31, 2020.

The Company has a mortgage note payable to Summit

Community Bank (the “Bank”), with a balance of $152 as

of March 31, 2021. The note has a maturity date of September

20, 2021 and a fixed interest rate of 3.99% annually with monthly

payments of $26 and is secured by principally all of the assets of

the Company. Under the terms of the note, the Bank will permit

chattel mortgages on purchased equipment not to exceed $250 for any

one individual loan so long as the Company is not in

default. 

The Company has a mortgage note payable to the Bank for the

construction of it's North Carolina facility.

The note carries a

ten year term at a fixed interest rate of 3.64% annually per the

construction of its North Carolina facility.

The note carries a ten

year term at a fixed interest rate of 3.64% annually per the

Promissory Note Rate Conversion Agreement, with monthly payments of

1 unchanged sentence

guarantee by the Company.

The balance of the note payable at

September 30, 2020 was $2,056.

The balance of the note payable at March

31, 2021 was $1,960.

On March 27, 2020, the Company completed the refinancing of

11 unchanged sentences

The loan matures on March 27, 2030.

The balance of the

note payable at September 30, 2020 was $2,591.

On April 16, 2020, the Company obtained a loan, evidenced by a

promissory note, under the Paycheck Protection Program (the "PPP")

from the Bank in the amount of $2,692.

The PPP provides for loans

to qualifying businesses, the proceeds of which may only be used

for payroll costs, rent, utilities, mortgage interest, and interest

on other pre-existing indebtedness (the "permissible expenses").

The interest rate per the promissory note, dated April 16, 2020 and

executed by the Company in favor of the Bank, is fixed at 1.00% per

annum, with principal and interest payments starting thirty (30)

days after the amount of forgiveness is determined under section

1106 of the CARES Act.

The balance of the note

payable at March 31, 2021 was $2,498.

The Company additionally has 4 smaller installment loans with

annual interest rates between 2.90% and 5.29%, maturing between

2021 and 2025, with varying balances totaling

Under the loan covenants with the Bank, the Company is limited to

annual capital expenditures of $3,500 and must maintain tangible

net worth of $10,000. The Company is in compliance with all

covenants pursuant to the loan agreements as of March 31,

In addition to the notes payable discussed above, on April 16,

2020, the Company obtained a loan, evidenced by a promissory note,

under the Paycheck Protection Program (the "PPP") from the Bank in

the amount of $2,692.

The PPP provides for loans to qualifying

businesses, the proceeds of which may only be used for payroll

costs, rent, utilities, mortgage interest, and interest on other

pre-existing indebtedness.

The interest rate per the promissory

note, dated April 16, 2020 and executed by the Company in favor of

the Bank, is fixed at 1.00% per annum, with principal and interest

payments starting thirty (30) days after the amount of forgiveness

is determined under section 1106 of the CARES Act.

During the first

quarter 2021, the Company estimated the current portion of the

balance due based on original loan repayment amounts amortized over

the estimated repayment period with a balloon payment due on the

maturity date.

The loan matures on April 16, 2022.

proceeds of the loan must be utilized pursuant to the requirements

of the PPP, and all or a portion of the loan may be forgiven in

accordance with the PPP applicable rules, regulations, and

Pursuant to the loan agreement relating to the PPP

loan, the Bank may accelerate the loan in the event of a default

under this or any other loan agreement with the

The Company additionally

has 4 smaller installment loans with annual interest rates between

3.99% and 5.29%, maturing between 2020 and 2025, with varying

balances totaling $139.

Under the loan covenants

with the Bank, the Company is limited to annual capital

expenditures of $3,500 and must maintain tangible net worth of

$10,000. The Company is in compliance with all covenants

pursuant to the loan agreements as of September 30,

In addition to the

notes payable discussed above, the Company has a $4,000 line of

credit with the Bank with no balance outstanding as of September

The line of credit is evidenced by a commercial

revolving promissory note which carries a variable interest rate of

prime and matures on October 1, 2021.

The loan is collateralized by

a first lien position on the Company's accounts receivable and

inventory and a second lien position on all other business assets.

Key provisions of the line of credit require the Company (i) to

obtain bank approval for capital expenditures in excess of $3,500

during the term of the loan;

and (ii) to obtain bank approval prior

to its funding any acquisition.

On October 21, 2020 the Company received a Commitment Letter from

the Bank to provide a guidance line of credit specifically to

purchase business equipment in an amount up to $1,500.

commitment provides for the purchase of equipment for which a note

payable will be executed with a term not to exceed five years with

an interest rate at the Wall Street Journal prime rate plus 0.50%

with a floor of 4.00% per annum.

The loan is collateralized by a

first lien position on all equipment purchased under the line.

The proceeds of

the loan must be utilized pursuant to the requirements of the PPP,

and all or a portion of the loan may be forgiven in accordance with

the PPP applicable rules, regulations, and guidelines.

the loan agreement relating to the PPP loan, the Bank may

accelerate the loan in the event of a default under this or any

other loan agreement with the Bank.

The Company has currently

applied for loan forgiveness in the full amount of the loan, but no

assurance can be given as to the amount, if any, of

Also in addition to the notes payable discussed above, the Company

has a $4,000 line of credit with the Bank with no balance

outstanding as of March 31, 2021 .

The line of credit is evidenced by a commercial revolving

promissory note which carries a variable interest rate of prime and

matures on October 1, 2021.

The loan is collateralized by a first

lien position on the Company's accounts receivable and inventory

and a second lien position on all other business assets.

provisions of the line of credit require the Company (i) to obtain

bank approval for capital expenditures in excess of $3,500 during

the term of the loan;

and (ii) to obtain bank approval prior to its

funding any acquisition. 

October 21, 2020 the Company received a Commitment Letter from the

Bank to provide a guidance line of credit specifically to purchase

business equipment in an amount up to $1,500.

The commitment

provides for the purchase of equipment for which a note payable

will be executed with a term not to exceed five years with an

interest rate at the Wall Street Journal prime rate plus 0.50% with

a floor of 4.00% per annum.

The loan is collateralized by a first

lien position on all equipment purchased under the line.

commitment for the guidance line of credit matures on October 21,

As of September 30, 2020, the Company had not purchased any

equipment pursuant to the $1,500 commitment.

As of March 31, 2021, the Company had not purchased any

equipment pursuant to the $1,500

The fair value of

1 unchanged sentence

Company's common stock at the close of the date of grant.

Restricted stock activity during the nine months ended September

Restricted stock activity during the three months ended March 31,

2021 is as follows:

1 unchanged sentence

Date Fair Value per Share

Balance, December 31,

19,667  

Non-vested, December 31,

36,336  

1 unchanged sentence

Non-vested, end of

Awards are amortized to

expense ratably, on an annual basis, over a three year vesting

term, except one grant in January 2019 for 2,000 shares of

restricted stock, which vested upon grant.

There was stock

compensation expense of less than $1 for the three and nine months

ended September 30, 2020 and $70 and $223 for the three and nine

months ended September 30, 2019, respectively.

unrecognized stock compensation cost as of September 30,

36,336  

$ 8.98  

Awards are being amortized to expense ratably, based upon the

vesting schedule.

Stock compensation (in thousands) for the three

month period ended March 31, 2021 was approximately $41, based upon

the value at the date of grant.

Stock compensation for the three

month period ended March 31, 2020 was approximately $1, based upon

the value at the date of grant.

There was $285 of unrecognized

compensation cost related to the non-vested restricted stock as of

March 31, 2021.

2.    Management’s Discussion and

25 unchanged sentences

uncertainties include, among other things, such factors

coronavirus outbreak, although the ultimate impact is uncertain at

this time, may significantly affect the Company's financial

condition, liquidity, and results of operations.

In this respect,

the Company has already experienced the following negative impacts

on its business:

backlog reduction, lower production volumes,

employee absence, bidding restrictions within certain key states,

and delays in receipt of materials through the Company's supply

the Company was profitable for the nine months ended September 30,

ultimate impact is uncertain at this time, the coronavirus outbreak

may significantly affect the Company's financial condition,

liquidity, and results of operations.

In this respect, the Company

has already experienced the following negative impacts on its

backlog reduction during 2020 from that in 2019, lower

production volumes, employee absence, bidding restrictions within

certain key states, and minor delays in receipt of materials

through the Company's supply chain,

the Company had net income for the three months ended March 31,

2021 and the years ended December 31, 2020 and 2019, there are no

3 unchanged sentences

our debt level increased in 2020, and

in the first nine months of 2020, and our ability to satisfy the

same cannot be assured,

availability of funding or financing in the event of the exercise

of the guaranteed buy-back with a certain customer,

our ability to satisfy the same cannot be assured,

ability to collect accounts receivable may be adversely affected by

the coronavirus outbreak,

the continued availability of

2 unchanged sentences

we have expended significant funds in recent years to increase

manufacturing capacity, there is no assurance that we will achieve

significantly greater sales,

manufacturing and rental capacity, there is no assurance that we

will achieve significantly greater revenues,

the extent to which we are successful

10 unchanged sentences

the outcome of future litigation, if

contract backlog,

potential decreases

in our year to year contract backlog,

our ability to produce and install

9 unchanged sentences

Annual Report on Form 10-K for the fiscal year ended December 31,

Investors and shareholders should

carefully consider such risks, uncertainties and other information,

disclosures and discussions which contain cautionary statements

identifying important factors that could cause actual results to

differ materially from those provided in the forward-looking

We undertake no obligation to publicly update or revise

any forward-looking statements, whether as a result of new

information, future events or otherwise.

Investors and

shareholders should carefully consider such risks, uncertainties

and other information, disclosures and discussions which contain

cautionary statements identifying important factors that could

cause actual results to differ materially from those provided in

the forward-looking statements.

We undertake no obligation to

publicly update or revise any forward-looking statements, whether

as a result of new information, future events or

Potential Effect of

the COVID-19 Outbreak

The Company invents, develops,

manufactures, markets, leases, licenses, sells, and installs a

broad array of precast concrete products for use primarily in the

construction, highway, utilities, and farming industries. The

Company's customers are primarily general contractors and federal,

state, and local transportation authorities located in the

Mid-Atlantic, Northeastern, Midwestern regions and parts of the

Southeastern region of the United States. The Company's

operating strategy has involved producing innovative and

proprietary products, including SlenderWall™, a patented,

lightweight, energy efficient concrete and steel exterior insulated

wall panel for use in building construction;

The Company invents,

develops, manufactures, markets, leases, licenses, sells, and

installs a broad array of precast concrete products and systems for

use primarily in the construction, highway, utilities, and farming

industries. The Company's customers are primarily general

contractors and federal, state, and local transportation

authorities located in the Mid-Atlantic, Northeastern, Midwestern

regions and parts of the Southeastern region of the United

States. The Company's operating strategy has involved

producing innovative and proprietary products, including

SlenderWall™, a patented, lightweight, energy efficient

concrete and steel exterior insulated wall panel for use in

building construction;

J-J Hooks®

Highway Safety Barrier, a positive-connected highway safety

Sierra Wall, a sound barrier primarily for roadside use;

Highway Safety Barrier, a

positive-connected highway safety barrier;

Sierra Wall, a sound

barrier primarily for roadside use;

and Easi-Set®

transportable concrete buildings, also

patented. In addition, the Company produces custom order

precast concrete products with various architectural surfaces, as

well as generic highway sound barriers, utility vaults, and farm

products such as cattleguards.

transportable concrete buildings, also patented. In addition,

the Company produces custom order precast concrete products with

various architectural surfaces, as well as generic highway sound

barriers, utility vaults, and farm products such as

cattleguards.

The Company was incorporated in

Delaware on August 2, 1994. Prior to a corporate

reorganization completed in October 1994, the Company conducted its

business primarily through Smith-Midland Virginia, which was

incorporated in 1960 as Smith Cattleguard Company, a Virginia

corporation, and subsequently changed its name to Smith-Midland

Corporation in 1985. The Company’s principal offices are

located at 5119 Catlett Road, Midland, Virginia 22728 and its

telephone number is (540) 439-3266. As used in this report,

unless the context otherwise requires, the term the

“Company”

refers to Smith-Midland Corporation and its

subsidiaries.

The Company was

incorporated in Delaware on August 2, 1994. Prior to a

corporate reorganization completed in October 1994, the Company

conducted its business primarily through Smith-Midland Virginia,

which was incorporated in 1960 as Smith Cattleguard Company, a

Virginia corporation, and subsequently changed its name to

Smith-Midland Corporation in 1985. The Company’s

principal offices are located at 5119 Catlett Road, Midland,

Virginia 22728 and its telephone number is (540) 439-3266. As

used in this report, unless the context otherwise requires, the

term the “Company”

refers to Smith-Midland Corporation

and its subsidiaries.

As a part of the construction industry, the Company's sales and net

22 unchanged sentences

The Company has already experienced an adverse impact to its

business by a reduction in backlog, lower production volumes,

employee absence, bidding restrictions within certain key states

such as Maryland and North Carolina, and minor delays in receipt of

materials through the Company's supply chain.

The Company may be

further negatively impacted in the following

business by a reduction in revenues in 2020 from that of 2019, a

reduction in backlog during 2020 from that in 2019, lower

production volumes, employee absence, bidding restrictions within

certain key states such as Maryland and North Carolina, and minor

delays in receipt of materials through the Company's supply chain.

The Company may be further negatively impacted in the following

53 unchanged sentences

and our ability to borrow under our bank line of credit could

i) as a micro cap public company, with

minimal trading volume, we do not have access to the public capital

markets as do larger public companies;

in this respect, the Company

has not raised equity funding through a private placement or

underwritten public offering since its initial public offering in

is actively monitoring the global situation on its financial

1 unchanged sentence

Although the Company experienced a loss in the first

quarter of 2020, as well as experiencing factors described above,

given the daily evolution of the COVID-19 outbreak and the global

responses to curb its spread, the Company is not able to ultimately

estimate the effects of the COVID-19 outbreak on its results of

operations, financial condition, or liquidity for fiscal year

quarter of 2020 and reduced revenues for the year 2020 as compared

to 2019, as well as experiencing factors described above, given the

daily evolution of the COVID-19 outbreak and the global responses

to curb its spread, the Company is not able to ultimately estimate

the effects of the COVID-19 outbreak on its results of operations,

financial condition, or liquidity for fiscal year

discussions below, including without limitation with respect to

3 unchanged sentences

are unlikely to be fulfilled.

Company had (in thousands) a net loss of $38 for the first quarter

2020, net income of $441 for the second quarter 2020, and net

income of $1,549 for the third quarter 2020, resulting in net

income of $1,952 for the nine months ended September 30, 2020.

cost of goods sold as a percent of revenue, not including

royalties, for the three and nine months ended September 30, 2020

was 72% and 79%, as compared to 83% and 82% for the three and nine

months ended September 30, 2019.

The decrease in cost of goods sold

as a percentage of revenue, not including royalties, for the three

and nine months ended September 30, 2020, compared to the three and

nine months ended September 30, 2019, is mainly due to the increase

in barrier rental revenues, which typically have higher margins

than product sales, a nd short-term

special barrier rental projects, which carry slightly higher

margins due to the complexity and risk of the projects .

Total revenues for the three and nine months ended September 30,

2020 were $12,515 and $32,789, respectively, compared to $13,209

and $32,249 for the three and nine months ended September 30, 2019.

The Company had a decrease in product sales mainly from reduced

sales in SlenderWall, barrier, and Easi-Set building sales,

although offset by an increase in architectural and miscellaneous

wall sales, compared to the same period in 2019.

The Company also

had a significant increase in barrier rentals for the three and

nine months ended September 30, 2020 compared to the three and nine

months ended September 30, 2019 mainly due to the increased linear

feet rented over the prior year, short-term special projects, and

the continued revenue recognition of the deferred buy-back lease

Operating expenses for 2020 remain in line with the

The Company continues to manage costs with the

strategic goals in place to increase exposure and sales efforts

towards SlenderWall sales and barrier rentals.

Company had (in thousands) net income of $2,867 for the first

quarter 2021, compared to a net loss of $38 for the first quarter

The cost of goods sold as a percent of revenue, not including

royalties, for the three months ended March 31, 2021 was 64%, as

compared to 86% for the three months ended March 31, 2020.

decrease in cost of goods sold as a percentage of revenue, not

including royalties, for the three months ended March 31, 2021,

compared to the three months ended March 31, 2020, is mainly due to

the increase in

barrier rental revenues, which typically have higher margins than

product sales, a nd short-term special barrier rental projects,

which carry slightly higher margins due to the complexity and risk

revenues for the three month period ended March 31, 2021 were

$15,218, compared to $9,825 for the three months ended March 31,

The increase was mainly from the barrier rentals, which

included multiple short-term special barrier rental projects and,

to a lessor extent, a continued increase in linear feet rented over

the prior year of the core rental fleet.

Future barrier rental

revenues are not expected t o

continue to trend at the same rate due to the nature and frequency

of the short-term special barrier projects.

Results of Operations (dollar

amounts in thousands, except per share data)

Three and nine

September 30, 2020 compared to the

ended September 30,

Three months ended March 31,

2021 compared to the

ended March 31, 2020

Revenue includes product

8 unchanged sentences

The following table summarizes the sales by

product type and comparison for the three and nine month periods

ended September 30, 2020 and 2019.

product type and comparison for the three month periods ended March

31, 2021 and 2020.

As indicated in "Overview;

Potential Effect of COVID-19 Outbreak" above, should the COVID-19

outbreak cause serious economic harm in our area of operations, our

revenue expectations are unlikely to be

Three Months Ended September

Nine Months Ended

$ 1,736  

Potential Effect of

COVID-19 Outbreak" above, should the COVID-19 outbreak cause

serious economic harm in our area of operations, our revenue

expectations are unlikely to be fulfilled.

Revenue by Type (Disaggregated

Three Months Ended March

Product Sales:

$ 1,699  

6 unchanged sentences

Total Product

20,036  

23,420  

Installation Revenue

3 unchanged sentences

$ 5,393  

$ 13,209  

$ 32,789  

$ 34,249  

Sales - Soundwall sales remained flat for the three and nine

month periods ended September 30, 2020 compared to the same periods

The Virginia plant continues to produce soundwall for the

largest soundwall contract in Company history, which was initially

awarded during 2018, and for which production is expected through

The revenue items:

soundwall sales, architectural panel sales,

SlenderWall sales, miscellaneous wall sales, barrier rentals, and

royalty income are recognized as revenue over time.

barrier sales, Easi-Set and Easi-Span building sales,

utility sales, miscellaneous sales, and shipping and installation

revenue are recognized as revenue at a point in

Sales - Soundwall sales were slightly lower for the three

month period ended March 31, 2021 compared to the same period in

The reduction is mainly due to reduced soundwall production

at the North Carolina and South Carolina plants during the first

quarter of 2021 compared to the same period in 2020.

plant continues to produce soundwall for the largest soundwall

contract in Company history, which was initially awarded during

2018, and for which production is expected through

Architectural

Sales - Architectural sales increased for the three and nine

months ended September 30, 2020 compared to the same periods in

The Company had one large architectural panel project begin

during the first quarter 2020 with continued production through the

third quarter 2020, while there was much lower architectural panel

production in the first nine months of 2019.

The Company was

recently awarded a large architectural project which began

production the fourth quarter 2020, with additional production

scheduled into 2021.

Sales - Architectural sales significantly increased for the

three months ended March 31, 2021 compared to the same period in

The Company was awarded a large architectural project which

began production the fourth quarter 2020 with significant

production during the first quarter 2021 and expected through the

second quarter 2021.

Sales - SlenderWall sales significantly decreased for the

three and nine month periods ended September 30, 2020 compared to

the same periods in 2019.

SlenderWall sales are generated on a

project basis, and success is determined by the number and dollar

value of projects awarded and produced in any particular period.

The decrease for the three and nine month periods ending September

30, 2020 compared to the same periods in 2019, is mainly

attributable to the Company finishing production of a major

SlenderWall project during the first and second quarter 2019, as

compared to the completion of several smaller projects during the

first quarter of 2020.

The revenue for the third quarter 2020 was

for a customer sample test panel and is part of the sales strategy

to expand the product offering and capabilities.

continues to focus sales initiatives on SlenderWall, but no

assurance can be given as to success of this endeavor, particularly

in light of the COVID-19 outbreak.

three month period ended March 31, 2021 compared to the same period

SlenderWall sales are generated on a project basis, and

success is determined by the number and dollar value of projects

awarded and produced in any particular period.

completed several smaller projects during the first quarter of

2020, compared to no sales during the first quarter 2021.

Company was recently awarded a large SlenderWall project set for

production in the third quarter 2021.

The Company continues to

focus sales initiatives on SlenderWall, but no assurance can be

given as to success of this endeavor, particularly in light of the

COVID-19 outbreak.

Miscellaneous

Wall Sales - Miscellaneous wall sales increased

significantly for the three and nine month periods ended September

30, 2020 compared to the same periods in 2019 due to the amount of

Wall Sales - Miscellaneous wall sales decreased

significantly for the three month period ended March 31, 2021

compared to the same period in 2020 due to the decreased amount of

retaining wall projects in production.

The Company was awarded

various miscellaneous wall panel projects in the later part of

2019, with production expected to continue into

Sales - Barrier sales

decreased during the three and nine month periods ended September

30, 2020 compared to the same periods in 2019.

Aligning with the

Company's strategy to shift to barrier rentals versus barrier

sales, barrier sales are expected to continue to trend lower than

previous periods.

increased during the three month period ended March 31, 2021

compared to the same period in 2020.

The main reason for the

increase is due to increased barrier sales at the South Carolina

plant during the first quarter 2021.

Aligning with the Company's strategy to shift to barrier rentals

versus barrier sales in the Delaware to Virginia region, barrier

sales are expected to trend lower than previous

Easi-Set®

1 unchanged sentence

Building Sales - Building and restroom

sales significantly decreased for the three and nine month periods

ended September 30, 2020 compared to the same periods in 2019

mainly due to a large building and restroom project occuring in

2019 which was produced at multiple plants.

Sales - Utility sales decreased for the three and nine month

periods ended September 30, 2020 compared to the same periods in

The Company continues to bid on utility projects and is

competitive on larger quantities, although there are competitors

who specialize in lower priced utility products.

sales increased for the three month period ended March 31, 2021

compared to the same period in 2020 mainly due to increased

building sales at the North Carolina and South Carolina plants

during the first quarter 2021 as compared to the prior

Sales - Utility sales slightly decreased for the three month

period ended March 31, 2021 compared to the same period in 2020.

The Company continues to bid on utility projects and is competitive

on larger quantities, although there are competitors who specialize

in lower priced utility products.

Miscellaneous

5 unchanged sentences

Miscellaneous product sales

increased for the three and nine month periods ended September 30,

2020 compared to the same period in 2019.

These products are

typically small in nature and the Company focuses it's priorities

on larger contracts.

increased for the three month period ended March 31, 2021 compared

to the same period in 2020.

The increase is mainly attributed to

specialty concrete blocks being produced at the North Carolina

Rentals - Barrier rentals increased significantly for the

three and nine month periods ended September 30, 2020 compared to

the same periods in 2019 due to the higher quantity of linear feet

rented than the previous year and a few short-term special

three month period ended March 31, 2021 compared to the same period

in 2020 due to the higher quantity of linear feet rented than the

previous year and, to a greater extent, a few short-term special

projects, which carried slightly higher margins due to the

complexity and risk of the projects.

Barrier rentals were also

positively impacted for the first nine months of 2020 with the

revenue recognition from the deferred buy-back lease obligation.

indicated above, the Company is shifting its focus to barrier

rentals compared to barrier sales with the significant increase in

the rental fleet in late 2019.

Its success in this endeavor will be

affected by the level of governmental spending on future public

highway products, which spending may be adversely effected by

cutbacks resulting from diversion of funds due to the COVID-19

Income - Royalties increased for the three and nine month

periods ended September 30, 2020 compared to the same periods in

Royalties for barriers started off slow in 2020 with the new

transition to the MASH TL3 standard, although royalty income has

increased during the second half of the year.

The Company is

uncertain how the COVID-19 outbreak will impact each licensee.

Company continues to seek new license opportunities to expand

product offerings around the world.

A substantial portion of the

total revenue from these special projects are expected to have

already been achieved in the first quarter.

As indicated above, the

Company is shifting its focus to barrier rentals compared to

barrier sales with the significant increase in the rental fleet in

Its success in this endeavor will be affected by the

level of governmental spending on future public highway products,

which spending may be adversely effected by cutbacks resulting from

diversion of funds due to the COVID-19 outbreak.

barrier rental revenues are not expected

continue trend at the same rate due to the nature and frequency of

the short-term special barrier projects.

Income - Royalties increased for the three month period

ended March 31, 2021 compared to the same period in 2020.

increase in royalties is mainly due to the increase in barrier

royalties during the first quarter of 2021 compared to the first

quarter of 2020.

The Company is uncertain how the COVID-19 outbreak

will impact each licensee.

The Company continues to seek new

license opportunities to expand product offerings around the

and Installation - Shipping revenue results from shipping

11 unchanged sentences

Shipping and installation revenue

decreased for the three and nine month periods ended September 30,

2020, compared to the same periods in 2019.

The decrease is mainly

a result of less SlenderWall and Easi-Set building installation

occurring in the first nine months of 2020 as compared to the same

period in 2019.

decreased for the three month period ended March 31, 2021, compared

to the same period in 2020.

The decrease is mainly a result of no

SlenderWall installation occurring in the first three months of

2021 as compared to the same period in 2020.

of Goods Sold - Total cost of goods sold, as a percentage of

total revenue, not including royalties, was 72% and 79% for the

three and nine month periods ended September 30, 2020,

respectively, compared to 83% and 82% for the same periods in 2019,

respectively.

total revenue, not including royalties, was 64% for the three month

period ended March 31, 2021, compared to 86% for the same period in

The decrease in cost of goods sold as a

percentage of revenue, not including royalties, for the three and

nine months ended September 30, 2020, compared to the three and

nine months ended September 30, 2019, is mainly due to the increase

in barrier rentals, which typically have higher margins than

product sales, and the short-term special projects, which carry

slightly higher margins due to the complexity and risk of the

percentage of revenue, not including royalties, for the three

months ended March 31, 2021, compared to the three months ended

March 31, 2020, is mainly due to the increase in barrier rentals,

which typically have higher margins than product sales, and the

short-term special barrier rental projects, which carry slightly

higher margins due to the complexity and risk of the

and Administrative Expenses - For the three months ended

September 30, 2020 the Company's general and administrative

expenses increased by $148 to $1,271 from $1,123 during the same

period in 2019 and for the nine months ended September 30, 2020 the

Company's general and administrative expenses increased by $79 to

$3,553 from $3,474 in the prior year.

The increased general and

administrative expenses for the three and nine month periods ended

September 30, 2020 is mainly attributed to the write-off of bad

debts associated with retainage on two large jobs, and a slight

increase in salaries and wages.

General and administrative expense

as a percentage of total revenue was 11% and 10% for the nine month

periods ended September 30, 2020 and 2019,

March 31, 2021 the Company's general and administrative expenses

increased by $274 to $1,325 from $1,051 during the same period in

The increased general and administrative expenses for the

three month period ended March 31, 2021 is mainly attributed to

stock compensation and an increase in salaries and wages.

and administrative expense as a percentage of total revenue was 9%

and 11% for the three month periods ended March 31, 2021 and 2020,

respectively.

Expenses  - Selling

expenses for the three months ended September 30, 2020 decreased to

expenses for the three months ended March 31, 2021 increased to

$595 from $591 for the same period in 2020.

Selling expenses for

the nine months ended September 30, 2020 decreased to $1,684 from

$1,924 for the same period in 2019.

The reduction in selling

expenses for the three and nine month periods are attributed to a

decrease in sales commissions compared to the same periods in the

The Company expects

selling expenses to increase in future periods with the plan for

additional sales associates aligning with the strategy to increase

SlenderWall and barrier rental sales.

Income (Loss) -

The Company had operating income for the three month period ended

September 30, 2020 of $2,049 compared to operating income of $753

for the same period in 2019.

The Company had operating income for

the nine month period ended September 30, 2020 of $2,581 compared

to operating income of $1,573 for the same period in 2019.

The increase in operating income for the three and nine month

periods ended September 30, 2020 compared to the same periods in

2019, was mainly due to the increase in gross profit margins

associated with barrier rentals.

Interest expense was $53 and $43 for the three month period ended

September 30, 2020 and 2019, respectively.

Interest expense was

$166 and $127 for the nine month period ended September 30, 2020

and 2019, respectively.

The Company expects interest expense to

increase for the full year 2020, as compared to the full year 2019,

due to the debt financing on the North Carolina expansion

project completed in the fourth quarter

March 31, 2021 of $3,802 compared to an operating loss of $42 for

the same period in 2020.

increase in operating income for the three month period ended March

31, 2021 compared to the same period in 2020, was mainly due to the

increase in gross profit associated with the increase in total

sales, mainly deriving from barrier

Interest expense was $42 and $56 for the three month periods ended

March 31, 2021 and 2020, respectively.

The Company expects interest

expense to continue to decrease for the full year 2021, as compared

to the full year 2020 with the refinancing of debt in March 2020

and the expected payoff of long-term notes during

Tax Expense (Benefit) -

The Company had an income tax expense of $941 with an effective

rate of 23% for the three months ended September 30, 2020 compared

to income tax expense of $179 with an effective rate of 24% for the

rate of 25% for the three months ended March 31, 2021 compared to

an income tax benefit of $11 with an effective rate of 22% for the

same period in 2020.

The Company had an income tax expense of $588

with an effective rate of 23% for the nine months ended September

30, 2020 compared to income tax expense of $364 with an effective

tax rate of 23% for the same period in

Income (Loss) - The Company had net income of $2,867 for the three

months ended September 30, 2020, compared to net income of $579 for

the same period in 2019.

The basic and diluted income per share was

$0.30 for the three months ended September 30, 2020, and the basic

and diluted income per share was $0.11 for the three months ended

September 30, 2019.

The Company had net income of $1,952 for the nine

months ended September 30, 2020, compared to net income of $1,207

for the same period in 2019.

The basic and diluted income per share

was $0.38 for the nine months ended September 30, 2020, and the

basic and diluted income per share was $0.24 for the nine months

ended September 30, 2019.

months ended March 31, 2021, compared to a net loss of $38 for the

same period in 2020.

The basic and diluted earnings per share was

$0.55 for the three months ended March 31, 2021, and the basic and

diluted loss per share was $0.01 for the three months ended March

Liquidity and Capital

4 unchanged sentences

context of the discussion below.

The Company has a

mortgage note payable to Summit Community Bank (the

“Bank”), with a balance of $301 as of September 30,

The Company has a mortgage note payable to Summit Community Bank

(the “Bank”), with a balance of $152 as of March 31,

2021. The note has a maturity date of September 20, 2021 and a

4 unchanged sentences

one individual loan so long as the Company is not in

default. 

The Company has a mortgage note payable to the Bank for the

construction of it's North Carolina facility.

The note carries a

ten year term at a fixed interest rate of 3.64% annually per the

construction of its North Carolina facility.

The note carries a ten

year term at a fixed interest rate of 3.64% annually per the

Promissory Note Rate Conversion Agreement, with monthly payments of

1 unchanged sentence

guarantee by the Company.

The balance of the note payable at

September 30, 2020 was $2,056.

The balance of the note payable at March

31, 2021 was $1,960.

On March 27, 2020, the Company completed the refinancing of

11 unchanged sentences

The loan matures on March 27, 2030.

The balance of the

note payable at September 30, 2020 was $2,591.

On April 16, 2020, the Company obtained a loan, evidenced by a

promissory note, under the Paycheck Protection Program (the "PPP")

from the Bank in the amount of $2,692.

The PPP provides for loans

to qualifying businesses, the proceeds of which may only be used

for payroll costs, rent, utilities, mortgage interest, and interest

on other pre-existing indebtedness (the "permissible expenses").

The interest rate per the promissory note, dated April 16, 2020 and

executed by the Company in favor of the Bank, is fixed at 1.00% per

annum, with principal and interest payments starting 

thirty (30) days after the amount of forgiveness is determined

under section 1106 of the CARES Act.

The loan matures

on April 16, 2022.

The proceeds of the loan must be utilized

pursuant to the requirements of the PPP, and all or a portion of

the loan may be forgiven in accordance with the PPP applicable

rules, regulations, and guidelines.

Pursuant to the loan agreement

relating to the PPP loan, the Bank may accelerate the loan in the

event of a default under this or any other loan agreement with the

The Company additionally

has 4 smaller installment loans with annual interest rates between

3.99% and 5.29%, maturing between 2020 and 2025, with varying

balances totaling $139.

Under the loan covenants

with the Bank, the Company is limited to annual capital

expenditures of $3,500 and must maintain tangible net worth of

$10,000. The Company is in compliance with all covenants

pursuant to the loan agreements as of September 30,

In addition to the

notes payable discussed above, the Company has a $4,000 line of

credit with the Bank with no balance outstanding as of September

The line of credit is evidenced by a commercial

revolving promissory note which carries a variable interest rate of

prime and matures on October 1, 2021.

The loan is collateralized by

a first lien position on the Company's accounts receivable and

inventory and a second lien position on all other business assets.

Key provisions of the line of credit require the Company (i) to

obtain bank approval for capital expenditures in excess of $3,500

during the term of the loan;

and (ii) to obtain bank approval prior

to its funding any acquisition.

On October 21, 2020 the Company received a Commitment Letter from

the Bank to provide a guidance line of credit specifically to

purchase business equipment in an amount up to $1,500.

commitment provides for the purchase of equipment for which a note

payable will be executed with a term not to exceed five years with

an interest rate at the Wall Street Journal prime rate plus 0.50%

with a floor of 4.00% per annum.

The loan is collateralized by a

first lien position on all equipment purchased under the line.

The balance of the note

payable at March 31, 2021 was $2,498.

The Company additionally has 4 smaller installment loans with

annual interest rates between 2.90% and 5.29%, maturing between

2021 and 2025, with varying balances totaling

Under the loan covenants with the Bank, the Company is limited to

annual capital expenditures of $3,500 and must maintain tangible

net worth of $10,000. The Company is in compliance with all

covenants pursuant to the loan agreements as of March 31,

In addition to the notes payable discussed above, on April 16,

2020, the Company obtained a loan, evidenced by a promissory note,

under the Paycheck Protection Program (the "PPP") from the Bank in

the amount of $2,692.

The PPP provides for loans to qualifying

businesses, the proceeds of which may only be used for payroll

costs, rent, utilities, mortgage interest, and interest on other

pre-existing indebtedness.

The interest rate per the promissory

note, dated April 16, 2020 and executed by the Company in favor of

the Bank, is fixed at 1.00% per annum, with principal and interest

payments starting thirty (30) days after the amount of forgiveness

is determined under section 1106 of the CARES Act.

During the first quarter 2021, the Company estimated the current

portion of the balance due based on original loan repayment amounts

amortized over the estimated repayment period with a balloon

payment due on the maturity date.

The loan matures on April

The proceeds of the loan must be utilized pursuant to the

requirements of the PPP, and all or a portion of the loan may be

forgiven in accordance with the PPP applicable rules, regulations,

and guidelines.

Pursuant to the loan agreement relating to the PPP

loan, the Bank may accelerate the loan in the event of a default

under this or any other loan agreement with the Bank.

has currently applied for loan forgiveness in the full amount of

the loan, but no assurance can be given as to the amount, if any,

of forgiveness.

Also in addition to the notes payable discussed above, the Company

has a $4,000 line of credit with the Bank with no balance

outstanding as of March 31, 2021 .

The line of credit is evidenced by a commercial revolving

promissory note which carries a variable interest rate of prime and

matures on October 1, 2021.

The loan is collateralized by a first

lien position on the Company's accounts receivable and inventory

and a second lien position on all other business assets.

provisions of the line of credit require the Company (i) to obtain

bank approval for capital expenditures in excess of $3,500 during

the term of the loan;

and (ii) to obtain bank approval prior to its

funding any acquisition. 

October 21, 2020 the Company received a Commitment Letter from the

Bank to provide a guidance line of credit specifically to purchase

business equipment in an amount up to $1,500.

The commitment

provides for the purchase of equipment for which a note payable

will be executed with a term not to exceed five years with an

interest rate at the Wall Street Journal prime rate plus 0.50% with

a floor of 4.00% per annum.

The loan is collateralized by a first

lien position on all equipment purchased under the line.

commitment for the guidance line of credit matures on October 21,

As of September 30, 2020, the Company had not purchased any

As of March 31, 2021, the Company had not purchased any

equipment pursuant to the $1,500

At September 30,

2020, the Company had cash totaling $7,449 and investment

securities totaling $1,208, compared to cash totaling $1,364 and

investment securities totaling $1,176 at December 31, 2019.

Investment securities at September 30, 2020 consist of shares of

USVAX (a Virginia Bond Fund). The increase in cash is

primarily the result of the PPP loan received on April 16, 2020 and

positive operating results.

Capital spending for the nine months

ended September 30, 2020 totaled $2,501, as compared to $3,392 for

the same period in 2019. The 2020 expenditures were mainly for

the purchase of rental barrier and yard expansion in Midland,

Virginia in which the Company committed to both during the fourth

quarter 2019, and miscellaneous manufacturing equipment.

Company has completed the yard expansion at Midland, Virginia and

intends to continue maintenance capital expenditures as needed over

the remainder of the year.

The Company's three mortgage notes

payable are financed at fixed rates of interest.

This leaves the

Company almost impervious to fluctuating interest

At March 31, 2021,

the Company had cash totaling $12,534 and investment securities

totaling $1,226, compared to cash totaling $8,764 and investment

securities totaling $1,228 at December 31, 2020.

securities at March 31, 2021 consist of shares of USVAX (a Virginia

Bond Fund). The increase in cash is primarily the result

positive operating results during the first quarter

Capital spending for the

three months ended March 31, 2021 totaled $376, as compared to $669

for the same period in 2020. The 2021 expenditures were mainly

for the purchase of rental barrier and miscellaneous manufacturing

The Company intends to continue maintenance capital

expenditures as needed over the remainder of the year, which is

expected to be approximately $1,500.

The Company's three

mortgage notes payable are financed at fixed rates of interest.

This leaves the Company almost impervious to fluctuating interest

rates. Increases in such rates will only slightly affect the

7 unchanged sentences

changes in the Promissory Note Rate Conversion

The Company’s cash flow from

operations is affected by production schedules set by contractors,

which generally provide for payment 35 to 90 days after the

products are produced and with some architectural contracts,

retainage may be held until the entire project is

The Company’s cash

flow from operations is affected by production schedules set by

contractors, which generally provide for payment 35 to 90 days

after the products are produced and with some architectural

contracts, retainage may be held until the entire project is

completed. This payment schedule may result in liquidity

3 unchanged sentences

(DSO), excluding the effect of unbilled revenue, was 66 days for

the nine months ended September 30, 2020 compared to 89 days for

the year ended December 31, 2019. The increase in DSO is

mainly due to retainage being withheld on multiple large

actual results regarding the Company's production, sales, and

subsequent collections on customer receivables are materially

inconsistent with management's expectations, the Company may in the

future encounter cash flow and liquidity issues.

the three months ended March 31, 2021 compared to 89 days for the

year ended December 31, 2020. The decrease in DSO is mainly

due to collection of retainage and the collection of multiple large

projects occurring in the first quarter 2021.

If actual results

regarding the Company's production, sales, and subsequent

collections on customer receivables are materially inconsistent

with management's expectations, the Company may in the future

encounter cash flow and liquidity issues.

If the Company's

5 unchanged sentences

believes that it's current cash resources, anticipated cash flow

from operations and the availability under the line of credit, and

the Payment Protection Plan loan received during the second quarter

2020 will be sufficient to finance the Company’s operations

for at least the next 12 months.

As a micro cap

public company, with minimal trading volume, the Company does not

have access to the public capital markets as do larger public

in this respect the Company has not raised equity

funding through a private placement or underwriting public offering

since its initial public offering in 1995.

The Company’s inventory was

$2,164 at September 30, 2020 and $2,242 at December 31, 2019,

or a decrease of $78. The decrease in inventory is due to the

reduction of barrier in finished goods on hand at September 30,

2020 with the transition to the MASH TL3 standard and the focus

shifting from barrier sales to barrier rentals.

Inventory turnover

was 14.9, annualized for the nine months ended September 30, 2020,

compared to 11.3, annualized for the same period in

from operations, and the availability under the line of credit will

be sufficient to finance the Company’s operations for at

least the next 12 months.

The Company’s

inventory was $2,347 at March 31, 2021 and $2,194 at

December 31, 2020, or an increase of $153. The increase

in inventory is due to the increase of stock items and raw

materials compared to the prior year.

Inventory turnover was 15.1,

annualized for the three months ended March 31, 2021, compared to

14.8, annualized for the same period in 2020.

Critical Accounting Policies

and Estimates

The Company’s critical

accounting policies are more fully described in its Summary of

Accounting Policies to the Company’s consolidated financial

statements on Form 10-K for the year ended December 31,

2019. There have been no changes as of September 30,

The Company services the construction

industry primarily in areas of the United States where construction

activity may be inhibited by adverse weather during the

winter. As a result, the Company may experience reduced

The Company’s

critical accounting policies are more fully described in its

Summary of Accounting Policies to the Company’s consolidated

financial statements on Form 10-K for the year ended

December 31, 2020. There have been no changes as of March

The Company services the

construction industry primarily in areas of the United States where

construction activity may be inhibited by adverse weather during

the winter. As a result, the Company may experience reduced

revenues from December through February and realize a more

6 unchanged sentences

adverse effect on the Company.

Raw material costs for the Company,

cement, steel, aggregates, and other direct materials used in

production have slightly increased for the first nine months of

The Company anticipates raw material prices should remain

flat for the remainder of 2020, although no assurance can be given

regarding future pricing.

As of November 2, 2020, the

Company’s sales backlog was approximately $20.6 million, as

Raw material costs for

the Company, cement, steel, aggregates, and other direct materials

used in production have slightly increased for the first three

months of 2021.

The Company anticipates raw material prices to

slightly increase for the remainder of 2021, although no assurance

can be given regarding future pricing.

As of April 30, 2021,

the Company’s sales backlog was approximately

$29.0 million, as

compared to approximately $26.6 million at the same time in 2020.

The decrease is mainly due to the reduction in bidding activity in

It is estimated that majority of the projects in the sales

backlog will be produced within 12 months, with a portion extending

several years.

It is estimated that majority of the projects in the sales backlog

will be produced within 12 months, with a portion extending several

3.    Quantitative and Qualitative Disclosures

About Market Risk

Not Applicable

4.    Controls and

1 unchanged sentence

controls and procedures

The Company carried out our

evaluation, under the supervision and with the participation of our

management, including our Chief Executive Officer and Chief

The Company carried out

our evaluation, under the supervision and with the participation of

our management, including our Chief Executive Officer and Chief

Financial Officer, of the effectiveness of our disclosure controls

5 unchanged sentences

that the Company’s disclosure controls and procedures were

effective at September 30, 2020.

effective at March 31, 2021.

(b)      Changes

in Internal Control over Financial Reporting

There has been no change in the

Company’s internal control over financial reporting during

the three months ended September 30, 2020 that has materially

There has been no change

in the Company’s internal control over financial reporting

during the three months ended March 31, 2021 that has materially

affected, or is reasonably likely to materially affect, its

3 unchanged sentences

I TEM 1.    Legal

The Company is not presently involved

in any litigation of a material nature.

The Company is not

presently involved in any litigation of a material

I TEM 1A.    Risk

3 unchanged sentences

I TEM 4.    Mine Safety

Not applicable

I TEM 5.    Other

6.    Exhibits

Change in Terms

Agreement, dated September 23, 2020, for the payment schedule

modification to the PPP loan with Summit Community

Comercial Line of Credit

Renewal Agreement and Note, dated October 1, 2020, for the renewal

of the line of credit in the amount of $4,000,000 with Summit

Community Bank

Commitment Letter, dated

October 21, 2020, for the renewal of the equipment line of credit

in the amount of $1,500,000 with Summit Community

Certification of the

31 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 5. Other Information